Game retail sales drop

Australian retail game hardware and software sales declined by 16 per cent in 2010, reversing a five year trend of ever-increasing record sales figures.

In each of the past five years, a new record score for the industry had been achieved, culminating in 2009’s result which passed $2 billion for the first time.

Data compiled by independent market research group GfK Retail and Technology Australia, which includes sales from hardware, gaming peripherals and traditional boxed software sold through retail outlets, showed that sales in 2010 were $1.7 billion.

It is conceivable that the $2 billion mark will never again be surpassed in Australia as consumers move away from traditional boxed products and more towards online purchases.

GfK does not measure online sales, downloadable content, online game subscriptions and game purchases for mobile devices such as Apple’s iPhone.

The growing popularity of gaming on devices like the iPhone and iPad also seems to be having an impact on console hardware sales.

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Console hardware sales declined by 27 per cent in 2010, with 1.6 million units sold compared to 2.2 million units the year before.

Console game sales were also down by 13 per cent, with 16.9 million units sold in 2010 compared to 19.3 million in 2009.

Surprisingly given the perception that PC gaming is in a slow decline, PC game sales actually increased by 7 per cent in 2010, with 3.1 million units sold compared to 3 million the year before.

For the third year in a row, the GfK data suggested “family games” were the best selling software genre, representing 21 per cent of all console games sold. The next most popular genre was action games at 20 per cent.

Ron Curry, CEO of the Interactive Games & Entertainment Association (iGEA), says despite the dip in sales Australia’s video and computer games industry remains buoyant compared to overseas gaming markets. Major markets such as Europe and the United States did not enjoy sales increases like Australia over the past two years due to challenging economic conditions.

“Compared to the most other international territories, our local interactive entertainment market has done considerably well to weather the global economic crisis which affected a broad range of entertainment industries,” Mr Curry says. “What we are seeing now is a levelling or righting of the market.

“Innovation continues to thrive and millions of Australian families are engaging with games through multiple formats whether it’s on a mobile device, online subscription or in more traditional PC and console formats.”

Mr Curry acknowledged that GfK’s retail data was an increasingly unreliable indicator of the health of the games industry in Australia.

“As the industry continues to evolve and interactive entertainment is delivered through increasingly diverse channels, it becomes more difficult to aggregate sales data through a single source,” Mr Curry says. “Anecdotally, sales of interactive entertainment products are continuing their healthy growth; however, the ways these products are being consumed and engaged with is expanding and changing dramatically, as is the industry itself.”

“Digital downloads, online subscriptions, micro and mobile games and alike are expanding consumer spend into areas that we are unable to measure in the traditional manner. 2011 will continue to see consumers investing in a wide range of interactive entertainment offerings which will further strengthen the ongoing success of the industry.”

The industry’s peak body has also been concerned about the accuracy of GfK data given that two market-leading game sellers, JB Hi-Fi and EB Games, refuse to supply market research group GfK with any retail data.

Australians spent $925 million on game hardware and software at retail in 2006, $1.3 billion in 2007, $1.96 billion in 2008 and $2.05 billion in 2009.

PriceWaterHouse Coopers expects the entire gaming market in Australia to be worth $2.5 billion by 2014.

PWC’s Australian Entertainment & Media Outlook 2010 – 2014 report predicts online and mobile games will drive future growth. Online games are forecast to reach $534 million by 2014, while mobile games will enjoy $496 in sales.

Update:

Sony and Microsoft say they are very pleased with 2010’s sales results.

Sony says the PS3 platform “achieved the number one place in terms of value and year-on-year value growth, representing 27 per cent of the approximate AU$1.7 billion industry”.

More than five million PS3 games were sold in Australia in 2010, with more money spent on PS3 software than any other platform and the highest software “attach rate” at 10 games per console. Software sales were up 41 per cent on the PS3 platform.

The biggest selling PS3 game of the year was Call of Duty: Black Ops, while Gran Turismo 5 was the best-selling PS3 exclusive title.

Sony says there are now over 1.1 million PS3 consoles in Australian homes. The install base for PSP in Australia is over 675,000, while PS2 has sold 2.6 million units.

Meanwhile, Microsoft says the Xbox 360 was the fastest growing console in the market in 2010 and enjoyed its biggest year yet.

Total sales for the Xbox 360 platform increased by 20 per cent, with Microsoft attributing much of the growth to the success of the Kinect motion control system. Christmas sales were particularly strong for the Xbox 360 platform, up 52 per cent compared to 2009.

Nintendo announced last month that the Nintendo DS was the biggest selling console in Australia in 2010, the fifth year in a row that the handheld had been on top of the hardware sales chart. The DS has sold over three million units in Australia.